While there are many reasons why a person might need to consider bankruptcy as an option, one primary reason is when someone has overspent or has been living beyond their means. Unfortunately, spending more than you make can become incredibly problematic over time, but you might not realize there is a problem at first. While some people are financially savvy, some do not have the skill or financial prowess that others have, and, as a result, many economic issues might arise. While it can certainly become a problem, recognizing signs that you are living beyond your means and that there is a problem will be critical. It’s also important to be aware that while in some cases, bankruptcy may be the most appropriate option, there are many other things to consider first. Here are some of the signs that you are living beyond your means:
#1. You Worry Over How You Will Pay Your Bills
Making a monthly payment can feel overwhelming, especially if you can barely cover them each month. In some cases, you may only be able to make minimum credit card payments which can feel as though you will never be able to recover or pay off your debts. If you are barely making your payments, it may be time to review everything to gain a real understanding of your financial situation.
#2. You Are Missing Monthly Payments
An even bigger challenge is when you are unable to cover your monthly payments each month. This may result in missing payments or skipping payments to pay for other financial obligations. In some ways, if you are struggling even to make your minimum payments, you may need to consider speaking with a lawyer to determine if bankruptcy is appropriate.
#3. The Lifestyle of Others influences your Spending Habits
Other people’s lives can be incredibly influential, especially with the constant sharing and posts on social media. These can offer many fallacies and give people a need to continually keep up with their peers or even influencers on social media. This can result in spending more than you can afford, damaging your financial health.
There are many other signs that not only indicate that a person is living beyond their means but that they may need to consider bankruptcy as an option, including, to name a few:
- Credit cards are maxed out
- Debt collectors are continually calling
- Being unable to qualify for a debt management plan
Realizing that you are living beyond your means can feel disheartening, but knowing means that you have the power to take control and do something about it. There are several options to consider to help with getting back on your feet, including:
- Make sure that you are living in a home and driving a car that you can afford
- Do not charge anything on a credit card unless you can pay it off each month
- Plan ahead for large purchases
- Start building up your savings
- Take a look at your budget and what you can afford
- Consider credit counseling with a professional to help build a budget, provide education, and help eliminate debts
- Consider debt consolidation as a way to pay off debts
- If all else fails, reach out to a lawyer to discuss whether bankruptcy is the best option
Financial challenges can result in stress, relationship issues, and more. It can be easy to ignore the problem in some cases, putting it off for another day. While this may be tempting, facing things head-on will be critical to taking action and determining how best to move forward. In some cases, filing for bankruptcy may be the best way to get out of the crushing debt you are struggling with each month. It will be necessary to carefully consider this by first speaking with a lawyer, like a Chapter 13 bankruptcy lawyer in Garland, TX from Allmand Law, to discuss your needs and weigh the options that may be available to you.